Cards are extremely common purchases – with birthdays happening throughout the year, there is continuous demand

Cards are extremely common purchases – with birthdays happening throughout the year, there is continuous demand, with regular spikes for Valentine’s Day, Father’s Day, Mother's Day and other special occasions. This creates a significant market, but supermarket diversification and the rise of online greetings card companies has made it a lot harder to run a profitable real-world card shop. That doesn’t mean it can’t be done – but there needs to be a very strong reason why people will visit you. Jamie Lawrence investigates the current card shop market, and the steps you’ll need to create to succeed in opening your own shop.

What does the market look like?

Demand for greetings card is strong, as always, although a small chunk of the market has been eroded by rise in popularity of frugality-inspired options such as making your own cards or sending electronic greetings cards. However, this has had a limited effect on the market, with most people still purchasing cards several times a year.

There are a number of heavyweights in the marketplace, selling a large range of greetings cards and associated goods (helium balloons, banners, etc). These appeal to a large segment of the market and it can be difficult to compete with them, although the case of Clinton Cards shows they are not immune – the combination of low margins, low-value products, a rise in internet retailers and high overheads makes it particularly hard for large stores to remain profitable.

With regard to smaller retailers, an increase in popularity of hand-made and ‘specialist’ cards, along with environmental concerns over the UK’s ‘throwaway card culture,’ has made it easier for independent shops to survive.

What training will I need?

There are no specialist card shop training programmes although you may wish to take a course in card making if you plan to sell your own products. This is quite beneficial as it means you can respond quickly to market trends and keep on top of your own supply. You can also diversify your revenue streams by offering a ‘made-to-order’ service, for special occasions.

In terms of general retail training, there is a great deal to be found. NVQs are particularly popular; you can specialise in many areas including retail operations, visual merchandising, customer service and more. Some institutions offer retail training as part of an overall business qualification, which may also include book-keeping and administration. If you don’t want to commit to a longer course, you can also take a short course, ranging from a day to a few weeks, in retail training.

Finding your place in the market

The market is made up of discrete players. Mainstream shops, online shops, specialist card shops, home-made card shops, local card shops – there are a wide range, but they tend to stay within their remit. This is because consumers in this sector stick to their views on what constitutes the ‘right’ card. Some don’t consider card choice important, and will buy cards based on price and how long it takes to buy it. Mainstream card shops, with high street locations, are therefore ideal.

Because you won’t have the buying power of larger firms, you really need to tap into other parts of the market - namely, people that value their card choices a bit more and want something that’s not mainstream. Local cards are popular, with images of nearby rivers and landmarks. Of course, if you open a local card shop, it needs to be in the right location – the more touristy, the better.

Hand-made card shops are also popular, and you can diversify revenue by offering a greater range of hand-made goods that people may buy when they come in to pick up a card – home-made soaps, for example.

Whatever type of shop you choose to set up, make sure there’s a target market (conduct sufficient market research) and make sure your brand and products match your vision. This is a competitive market – having a strong unique selling point can keep you visible, so don’t be afraid to push boundaries.

Diversifying revenue streams

Cards can be low-profit items, depending on the type you sell and where you source them. This, along with the seasonal nature of card sales, makes diversifying your revenue streams a good idea, so you can maximise your income all year round.

You may wish to provide these additional services/products:

  • Framed pictures and prints
  • Helium balloons
  • Party supplies
  • Home-made soaps and cosmetics
  • Photo scrapbooks, coasters, etc
  • Picture framing
  • Local arts and crafts

Make sure that the services and products you sell match your brand.

Start-up costs

Retail businesses have two significant costs when they first open: renting commercial premises and retrofitting it for purpose. These will make up the majority of your start-up costs. The remainder will go on stock, insurance, utilities and promotion, as well as recruitment costs if you are employing someone from the start.

Depending on your location (high street premises will cost more), you should budget around £10,000+ for starting your card shop – this could be higher though if you sell more expensive goods, such as commercial cards and helium balloons.

Marketing will also cost you money – make sure you make a decent marketing plan so you can keep track of budgets, and get the maximum exposure for your cash.

Insurance and compliance

As with all retail businesses, public liability insurance is important, as well as professional indemnity insurance. You’ll also need employer’s liability insurance if you want to employ staff. If you rent a property, buildings insurance should be covered by your landlord, but you’ll need it if you buy commercial property outright.

You’ll also be required to comply with relevant health and safety legislation, for example putting up wet floor signs if you open the shop to customers soon after the floor has been cleaned. If you sell products for consumption that you’ve handled, such as home-made fudge, you’ll need to comply with relevant food safety legislation. Talk to the Health and Safety Executive (HSE) for more information.